Investigating the drivers and barriers of construction innovation in Malaysia

Chang, Daniel Xiau Yie (2025) Investigating the drivers and barriers of construction innovation in Malaysia. Final Year Project, UTAR.

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Abstract

The construction industry is a cornerstone of economic development, yet it remains comparatively slow in adopting innovation relative to other sectors like manufacturing and information technology, especially in Malaysia. This study investigates the drivers, barriers, and underlying factors influencing construction innovation in the Malaysian construction industry. Motivated by the growing importance of innovation for competitiveness and sustainability, the research combines an extensive literature review with a structured questionnaire survey of 150 practitioners, including developers, consultants, and contractors in the Klang Valley region. Rigorous statistical analyses were applied to ensure the robustness of findings, including reliability testing, normality assessment, and factor analysis. The results identified technology push, environment and sustainability, technological capability, strategic alliances, and subsidies as the most critical drivers, reflecting both global trends and local industry needs. Conversely, lack of financial resources, operational resource gap, lack of technical capabilities, lack of incentives, and inappropriate legislation emerged as the most significant barriers. The factor analysis further revealed six latent drivers and five latent barriers, illustrating that innovation is influenced by institutional, organisational, market, and behavioural dynamics. Respondents also expressed cautious optimism about the future, acknowledging the importance of innovation for competitiveness while noting persistent concerns over preparedness and resource allocation. The study provides important implications for practice, policy, and academia in Malaysia, as well as for other developing countries facing similar challenges or seeking to develop a more future-ready construction industry. Overall, the findings underscore the need for coordinated strategies to overcome barriers and transform innovation awareness into sustained industry advancement. Keywords: construction industry; construction innovation; drivers; barriers; Malaysia Subject Area: HD9715-9717.5 Construction industry

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